The Wall Street Journal today ran a good sized article about the growing trend of apparel retailers partnering with virtual worlds to reach teen/twenty-something audiences in an immersive environment beyond text links or search advertising. Outside of the fact that the article missed our own existing and successful Meez deals with big fashion brands like Nike (NYSE: NKE), Marshalls (NYSE: TJX), Sears (NasdaqGS: SHLD), Metropark and Apple Bottoms, the article really nailed the trend we're seeing in the segment.
What we see over and over again is the desire of branded CPG's (consumer packaged goods companies) to reach the always desirable younger audience where they are consuming media and before they are set in their brand preferences - those categories are increasingly comprised of video games (male), social media (mixed) and virtual worlds (mixed), and decreasingly comprised of newspapers, magazines, broadcast radio and broadcast television (cable is hanging in there for now). If these big brands are not in front of these 3 emerging categories, then they're simply not in front of where their audience spends an increasing percentage of their day, every day.
With MeezNation users spending an average of 52 minutes a day in our virtual world, and our competitors like Gaia Online and IMVU seeing similar usage stats, it's a perfect place to introduce users to a brand, communicate its unique brand values, and provoke brand engagement, as well as clicks back to the brand's site. There is almost no other ad medium (outside of pre-roll video - see post here) which can do both of those tasks, so it's no surprise that apparel and shoe retailers are starting to wake up to these opportunities.
The primary downside is that the technical resolution of most of the virtual worlds isn't high enough to truly differentiate by old school methods like thread count, but it's still more than enough to communicate all of the key brand attributes, whether it's a music association (see LG on Meez) or a Back to School approach (e.g. Sears "Arrive"), as you can see from the Meez below, dancing the Hammer dance from our deal with DanceJam.
Given the amazing brand adoption stats that Meez sees (e.g. 700,000 Sears items adopted so far by Meez users, and a repeated cry by our users to bring back our discontinued NikeID shoes) as do our competitors, it's no doubt that we'll see an influx of apparel and shoe companies into the space. What is still surprising to me is why brands continue to go into the downloadable 3D worlds, which have a much smaller number of users and a less brand-friendly audience (think of your brand being attacked by gun-toting terrorists like happened to American Apparel (AMEX: APP) than mainstream worlds like Meez and Gaia Online.
The brand focus is already shifting to big, mass market virtual worlds where millions of monthly users replicate their real world experiences, interact with each other, and search for brands to adopt to identify themselves to their old friends and new-found ones as well. The good news is that the forward-thinking apparel and shoe brands are starting to discover the category right now.